Essential Legal Guide: Florida Expansion for Foreign Entities – Why Your Existing Contracts May Be Legally Void

Expanding your business into Florida can be an exciting step, new markets, new customers, and new opportunities. But for many out-of-state or international companies, one crucial legal detail often gets overlooked: if your business isn’t properly registered to operate in Florida, your existing contracts may not be enforceable in Florida courts.

This issue catches business owners by surprise all the time. You may think you’re fully compliant because your company is legally formed in another state or country, but under Florida law, that’s not enough.

Let’s break down why this happens, what it means for your business, and how to fix it before a costly dispute arises.

What Does It Mean to Be a “Foreign Entity” in Florida?

In Florida, a foreign entity simply refers to a business formed outside of Florida,  whether that’s another U.S. state (like Delaware or New York) or another country entirely.

Under Florida Statutes § 607.1501, foreign corporations and limited liability companies must register with the Florida Department of State before “transacting business” in the state. “Transacting business” is interpreted broadly, signing contracts, hiring Florida-based employees, leasing property, or maintaining a regular business presence here all qualify.

If your company is doing any of these things without proper registration, Florida law considers it unauthorized to conduct business within the state.

Can You Still Enforce Your Contracts if You’re Not Registered?

This is where things get risky. Under Florida Statutes § 607.1502(1), a foreign entity that is not registered “may not maintain an action or proceeding in any court in this state until it obtains a certificate of authority.”

In plain English: if your business is not registered in Florida and a contract dispute arises here, you may be barred from suing in a Florida court to enforce your own contracts.

That means even if you’re in the right, if a client refuses to pay, a partner breaches an agreement, or a vendor fails to deliver, your hands may be tied until you fix your registration status.

Are My Existing Contracts Void or Just Unenforceable?

This is a subtle but important distinction. Your contracts themselves are not automatically void, but they become unenforceable in Florida courts until your entity properly registers. That means you cannot file a lawsuit in Florida until you bring your company into compliance.

Even worse, if the statute of limitations (the time limit to file a claim) runs out while your company is unregistered, you could permanently lose your right to recover damages.

The good news? Once you properly register and obtain a Certificate of Authority, you can typically proceed with enforcement, but you might still face delays, added costs, and procedural hurdles.

What About Foreign Entities Based Outside the U.S.?

For international businesses, the same rule applies, but compliance can be even more complex.

Foreign companies expanding into Florida must file specific documentation through the Florida Department of State Division of Corporations (Sunbiz), often including:

• Certified copies of formation documents from their home country
• Proof of good standing from their jurisdiction of origin
• Designation of a Florida registered agent for service of process

Without these filings, any contracts entered into on behalf of the foreign entity in Florida risk being unenforceable under state law.

Real-World Example: A Costly Lesson in Noncompliance

Imagine a UK-based technology firm that signs a $2 million software licensing deal with a Miami company. When the Florida company fails to pay, the UK firm files a lawsuit,  only to have the case dismissed because the company never registered as a foreign entity in Florida.

By the time they fix their registration issue, months have passed, and the Florida company has filed for bankruptcy. The UK firm loses the chance to recover.

This kind of situation happens more often than you might think, especially with tech companies, construction firms, and real estate investors entering the Florida market for the first time.

How to Protect Your Business Before Expanding into Florida

If you’re planning to expand operations or sign Florida-based contracts, here’s what you should do before taking any major step:

1. Register as a Foreign Entity: File your registration through Florida’s Division of Corporations (Sunbiz.org) and obtain a Certificate of Authority.
2. Update Your Contracts: Make sure all agreements specify the correct legal entity name and jurisdiction of registration.
3. Use a Florida Registered Agent: This ensures you can receive legal documents promptly and comply with Florida’s procedural rules.
4. Consult a Business Attorney: Every business is different. An attorney can review your operations and contracts to ensure you’re protected under Florida law.

Why Work with a Florida Business Litigation Attorney

At Ayala Law, we represent businesses from across the U.S. and abroad that operate or expand into Florida. Our team understands both the technical and practical aspects of doing business here, from formation and registration to complex litigation. We’ve seen how small compliance oversights can lead to major financial exposure, and we help clients fix these problems before they turn into legal battles.

If your business is expanding into Florida, or if you’ve discovered that your contracts may not be enforceable, contact one of our experienced attorneys in Miami at 305-570-2208.

You can also contact our founding attorney Eduardo A. Maura at eduardo@ayalalawpa.com.

Schedule a case evaluation online here.

[The opinions in this blog are not intended to be legal advice. You should consult with an attorney about the particulars of your case].